Supply Chain Traceability: How It Benefits Your Business

The push towards greater sustainability is transforming supply chain management as companies collaborate with their suppliers to reduce their environmental impact and act with greater social responsibility. Aiding them in achieving this social responsibility are technologies such as end-to-end visibility and blockchain, which allow for transparent and accurate tracking and traceability of specific items in the supply chain.

What is Supply Chain Traceability?

It refers to how a business tracks products from production to retail shelves. Supply chain traceability is essential to any successful business because it allows companies to track products from inception to purchase and even further to their end-of-life activities – whether the product is resold or recycled. Traceability ensures accountability, transparency and sustainability.  

Steps to Implement Supply Chain Traceability

A traceable supply chain allows organizations to achieve their primary objectives – improve sustainability, efficiency, resilience and performance. 

1. Track Risks and Set Goals

A business must look at the risks it is immediately exposed to, such as compliance risks, disruptions the company has faced historically, and supplier relationships. This step also involves plotting all potential ESG issues affecting the business and co-relating them with the business risks to lay out the company strategy and goals.

For example, sourcing sustainable raw materials could satisfy stakeholder interests and impact the company’s performance. Adopting a blockchain traceability supply chain helps in achieving the above objectives.

2. Visualize the Supply Chain & Collect Information

Once the risks are identified, the next step is to visualize and map the end-to-end supply chain. Visualization tools provide unique insights into the supply chain for a better understanding of the cargo flow volume, gauging the suppliers and processes, and unearth potential gaps, risks and opportunities for improvement and innovation.

3. Set the Level of Disclosure

Lastly, organizations must set parameters for the disclosure of information. They must balance regulatory requirements against stakeholder demands and decide ways to authenticate the published data. Any supply chain transparency technology must be aligned with the objectives and have the backing of all stakeholders. It must collate relevant data, provide actionable insights, and circulate these insights to all stakeholders.

Connecting Traceability to Business Objectives

Connecting supply chain traceability to business objectives is crucial for any company that wants to succeed in today’s marketplace. By doing so, companies can ensure that they produce high-quality, sustainable products that meet their customers’ needs. Moreover, with end-to-end visibility, the product is traced throughout the entire supply chain, ensuring quality and reducing the risk of product defects and recalls.

Benefits of Supply Chain Traceability

The most significant benefits of supply chain traceability are regulatory compliance and enhanced reputation.

1. Improve Supply Chain Integrity

Traceability prevents fake products and ensures the authenticity of products. It tracks the product through its entire lifecycle — from raw material sourcing to the customer — and further provides visibility if it is resold, reused, recycled or recalled. Traceability also helps to remove supply chain bottlenecks and ensures quality, safety and a sustainable supply chain.

2. Reduce the Risk of Mislabeling

Digitized labeling such as barcodes or RFID tags contains information for tracking and tracing a product throughout its lifecycle. It helps to identify fake or faulty products and assures its genuineness. This prevents the risk of mislabeling.

3. Track Product Management

The traceability and tracking management systems could be capturing data within their supply chain or across a multi-supplier network capable of tracking across the entire value chain.

• Traceability of processing details, such as type and stages for producing the product.
• Traceability of quality checks at each step of the product cycle.
• Product manufacturing date, batch, lot, and type must be recorded and labelled accordingly.
• Record where the product was sent (forward tracking) and from where it came (backward tracing).
• The above details must be recorded using time stamping and linked to identifiers for verification and audit purposes.

4. Simplify Audits

Tracking management of a product helps at the time of audit. The auditor can perform due diligence easily and verify whether the product has been sourced, manufactured and transported as per sustainability practices and established norms. 

Conclusion

Organizations must collaborate and ensure information, resources and costs incurred are shared with multiple stakeholders to effectively build end-to-end visibility and traceability and foster growth and resilience. 

FAQs

Why is Traceability Important in The Supply Chain?

Supply chain traceability is essential to any successful business because it allows companies to track products from inception to purchase and even further to their end-of-life activities – whether the product is resold or recycled. It also helps improve sustainability, efficiency, resilience and performance.

What is Traceability in Logistics?

Traceability in logistics is the ability to pinpoint a product’s various stages from origin to the end-user. This helps in locating the product at any time across the supply chain.

How Can Traceability be Improved in the Supply Chain?

An organization can improve its supply chain traceability by digitally labeling its products and ensuring end-to-end supply chain visibility that helps track the product from its origin to end of life.